Central banks will likely have a significant role to play as fears about Europe's debt crisis continue to hurt financial markets around the world but some feel their influence is waning.
In the past, central banks in the United States, Japan and Europe have slashed interest rates to a record low and then flooded the financial system with money.
In New Zealand and Australia, the Reserve Banks have cut their interest rates with the RBA moving its rate down a further 0.25% yesterday to 3.5%, just 1% higher than the New Zealand official cash rate of 2.5%.
The RBA cut is the second in as many months as it signals the deepening fear about the global economy. The RBA has previously warned of further slowing growth in China, the country's largest trading partner.
Forsyth Barr broker Peter Young said the RBA's cut was more precautionary than anything else and further easing would need evidence of a hard landing in China and clear domestic slowing.
"The risk of aggressive rate cuts over coming months is diminishing. The RBA merely sought to bolster the local mood.
"It's more of a precautionary rate cut to bolster sentiment."
Doubts are surfacing about how much influence the central banks will have this time, but investors are starting to expect the US Federal Reserve to do something more when it meets later this month. But apart from buying up bonds, there does not seem much the Fed can do, with interest rates already close to zero and the presidential election seemingly ruling out more borrowing or the printing of money.
Some US sceptics are looking for China to save the day but they, too, may be disappointed. With the Chinese economy slowing, some economists fear Beijing can ill afford to run up more debt.
"Not only is the policy room smaller, but the incentives for the [Chinese] Government to produce a larger stimulus package are smaller," Capital Economics China economist Qinwei Wang told Reuters.
Westpac New Zealand chief economist Dominick Stephens said markets were pricing in a lower official cash rate in coming months, which was a fair reflection of the balance of risks.
"But our view remains that an extended period of on-hold rates is the most likely outcome."
Westpac believed the OCR would remain on hold at 2.5% for the rest of the year. There was a "meaningful chance" of about one in four that the European crisis led to a market breakdown on par with the 2008-09 global financial crisis. In that case, the Reserve Bank would respond similarly and cut interest rates hard, probably by 1%, he said.
Market pricing for a weighted average of those two scenarios would look exactly the same as if the market were pricing in a certain 0.25% cut.
"The trouble is, that is one of the least likely outcomes that we can imagine. If the Reserve Bank is provoked into cutting rates at all, it won't be for a mere 0.25%."
Domestic conditions alone were not making the case for a rate cut and Mr Stephens placed low odds on a rate cut at the June 14 Monetary Policy Statement.
In Greece, nothing would be resolved until after the elections on June 17. It was impossible to pre-empt the outcome there and it should be remembered that overseas authorities would be making their own responses to the global situation.
"By now it seems futile to hope for a comprehensive response to the European crisis but it's possible that markets have sufficiently bullied the authorities into some stabilising measures in the near future," he said.
